College dependent out of state, what state tax returns?

[msvicki]

I am a NE resident, my son (21) goes to school full time in CO.  He changed his drivers license from NE to CO this summer and for 2019 has only earned income in CO from a part time job.  He is still my dependent per tax rules as I provide more than half of his support and he is a full time student and will be claimed as a dependent.  The question is on turbo tax his residency as of Dec 31- do we put CO since he has his license there and goes to school/worked there or for tax purposes is it still NE?  If it is CO then does he still need to file a NE state return since he was a resident here for part of the year even though he earned no income in NE for the entire year?  If his residency is NE then does he need to file both CO and NE state returns?   Thanks in advance

[JohnB5677]

Please see: Original Post KatherineC

YES, you can claim a college student as your dependent, even if they are living (legal resident) in another state.

He will file a Colorado return, but unless he had income he does not have to file Nebraska.

Generally speaking, to be a dependent, your child has to live with you for more than half the year.  However, one of the exceptions to this rule, is if your child is away at college for more than half the year.

Your child has to meet certain requirements:

     Under the age of 24 on December 31.

     Enrolled in an undergraduate program at an accredited college/university

     Is a full time student for at least five months of the year

     Your child provided less than 50% of his/her own support

[Hal_Al]

You list his residence as NE.  In order for you to claim him, as a dependent, under the Qualifying Child rules, he must be considered as living with you. Students away at college are still considered as living at home.

He files a CO non resident return and a NE resident return.  NE will give him a credit, or partial credit,  for tax paid to CO.

[msvicki]

Thanks for the reply, I do understand that I can claim him and the dependency rules.  My question is what does he claim as his state of residence since he now has a CO license?  Do you agree with the reply posted after yours that he has to put NE as his state of residence and file both  CO and NE taxes?  I just don't know where to find a definitive answer.  Thanks

[AmyC]

College kids, let's get this sorted out. Your son has a driver's license in a different state, that alone does not make him a resident. You are paying his bills, he lives with you when not in school. If he had created a life over there, you would not be claiming him. When he graduates, if he doesn't have a job, will he come home? 

Two options:

1. He is there for school, the license was convenient and he comes home when he can. He is a NE resident.
2. He wants to stay and live in CO and that his intention is to stay there. He votes, does and says things as a CO resident. He is a CO resident.

Clear as mud, I have a college kid with a license in another state as well. Remember the big picture here. Each state just wants to tax their share of the money.

[CM_VA]

I need this answer too! In a different post I saw that we will flag the IRS if our dependent college student files with residency in a different state for tax purposes. But here our expert says its ok for the student to file only  in the state of their college where they are working, even if they are dependents. I wish I knew for sure.

[MonikaK1]

Determining state residency can depend on a variety of facts and circumstances as well as individual state law.

For tax purposes, a college student is usually a resident of their home state because they are only temporarily out of state to attend college. If they also work in the state where they attend school, they may need to file a tax return for that state if their earnings exceed the state's threshold for a nonresident to be required to file,

Please see this TurboTax help article for more information on determining the state of residency for tax purposes.

[CM_VA]

Thank you for this! By the definitions on the helpful TurboTax help page you reference above, we confirmed that my college-student daughter is a resident of our home state, Virginia, and a non-resident of Illinois, her university state (but is still required to file in Illinois, since she earned more than their exemption amount)(and also in Virginia, though she owed nothing). However, as we complete her state TurboTax forms (everyone: start with the remote/college state, to better populate your home state!), the TT step-by-step did not make it possible for us to declare this. Since her W2 showed income in her college state, the TT step-by-step said, "We can tell you were a part-year resident of Illinois in 2022 from your federal taxes", and did not give us the option to change that assumption. I had to override the step-by-step and go straight to the form to specify that she was a non-resident rather than a part-year resident.